0% Interest Seller Financing

[Vitaliy Zima]

Hello,

I have a wholesaler who approached me on a house that is being seller financed and is need of cosmetic work. Seller is selling for 160k, wholesaler gets 2,500 for the deal. Seller is asking for 10k down. All payments will be applied to principal balance because it is 0% interest. On year 8 theres balloon payment of 44,400. 

The catch is, they have it priced at about 20-40k above comps. 

Total monthly cost for me would be (principal+taxes+insurance) about 1,150 and rent is roughly 1,500, meaning I would cash flow roughly $350 but with vacancy and repairs we can reduce that down to roughly $200-250 per month. The estimated cosmetic work needed will cost an additional 20k or so. 


I have never purchased a 0% interest deal before and I am trying to understand how to calculate whether this deal is worth it (I am a cash flow investor). I do like the idea of 0% interest and all of my payments go straight to principal and technically speaking I will be cash flowing at the same time. Please advise at what kind of deals you have been getting at 0% interest and what do you look for in deals like this?

Another thing to note - this is a tertiary market - population of about 65k - 1.5hrs away from memphis, TN. 

Any advise would be VERY much appreciated! 

Thanks!